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The fundamental disadvantage of a centrally planned economy is that local conditions, which often vary from one place to another (and can change rapidly), cannot be accounted for at the highest levels of planning. Another serious disadvantage is the cost incurred by such an economy's numerous executive agencies and administrators.

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9y ago
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9y ago

There are many problems associated with centrally planned economies. They not only affect the economy of a such a nation but affect the fabric of its society. Here is an outline detailing the actions and its problems:

A. The premise that central planners in a government are best qualified to guide economic activity is flawed. The example of failed five year economic plans in the former USSR is often used to debunk that premise;

B. Decisions as to what goods and services should be produced and how much should be produced is problematic at best. At worst, they create economic distortions that wreak havoc with consumers; and

C. Any "theory" that pre-supposes that the government is the best way to organize an economy and promote the well being of an nation has failed too many times in too many places.

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8y ago

People are not free to conduct free enterprise and improve their communities. There's no freedom of commerce as such because they're all owned by the state.

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6y ago

disadvantages of command economy,

Command economy,

Command economy disadvantages

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11y ago

you make like no money

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Q: What is one of the major disadvantage's of a centrally planned economy?
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Explain how a government is involved in a centrally planned economy?

it controls all major sectors of the economy and formulates all decisions about their use and about the distribution of income


Who answers the questions in a centrally planned economy?

Typically, a person who knows the answer will answer a question put to him and being in a centrally planned economy has nothing to do with it.If the question intends to ask "Who makes the decisions of how much to produce in a centrally planned economy?" the answer to that would be, generally speaking, the government, and specifically it would be an economics ministry of the state. In the Soviet Union, for example, there was the State Planning Committee, popularly known as Gosplan, that made key decisions in terms of how much to produce in all major industries.


What are Economic goals of a centrally planned economy?

Equality is a major goal of a centrally planned government. Also growth is, but they only want the economy as a whole to grown not an individual. Also they want people to feel secure, but only secure enough so that they do not rebel against the government.


What are major economy?

Major economies are the states main item. Say like, shipping and fishing are the New England Region major economy.


Advantages and disadvantages for small business?

Advantage: Are the major employer in the country and help keep the economy strong. Disadvantage: Everybody including polititions think they have plenty of money when the case is that they are usually struggling to get by.

Related questions

What a major disadvantage of centrally planned economy?

it cannot meet consumers needs and wants


Explain how a government is involved in a centrally planned economy?

it controls all major sectors of the economy and formulates all decisions about their use and about the distribution of income


Who answers the questions in a centrally planned economy?

Typically, a person who knows the answer will answer a question put to him and being in a centrally planned economy has nothing to do with it.If the question intends to ask "Who makes the decisions of how much to produce in a centrally planned economy?" the answer to that would be, generally speaking, the government, and specifically it would be an economics ministry of the state. In the Soviet Union, for example, there was the State Planning Committee, popularly known as Gosplan, that made key decisions in terms of how much to produce in all major industries.


What are Economic goals of a centrally planned economy?

Equality is a major goal of a centrally planned government. Also growth is, but they only want the economy as a whole to grown not an individual. Also they want people to feel secure, but only secure enough so that they do not rebel against the government.


What is a major disadvantage of a central planned economy?

it cannot meet consumers needs and wants


What two major market structures are affected by industrial regulation?

A mixed market and planned economy.


What was not a common feature of major cities at the end of the 19th century Mass transit became more common Slums shrank due to an economic boom Cities?

Urban growth was centrally planned.


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the former slave who preached resistance to slavery and planned a major uprising in Charleston was


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Advantages and disadvantages for small business?

Advantage: Are the major employer in the country and help keep the economy strong. Disadvantage: Everybody including polititions think they have plenty of money when the case is that they are usually struggling to get by.